Justice Department Recovers Record $3.1 Billion
in Fraud and False Claims in Fiscal Year 2006

Largest Amount Ever Recovered in a Single Year

WASHINGTON – The United States in the fiscal year ending September 30, 2006
recovered a record amount of more than $3.1 billion in settlements and
judgments in cases involving allegations of fraud against the government, the
Justice Department announced today. Previously, the Department’s largest
recoveries totaled $2.2 billion for FY 2003. The largest of the FY 2006
settlements against two industry giants – Tenet Healthcare Corporation and The
Boeing Company – comprised nearly half the total.

“These record recoveries send a clear message that the Justice Department will
not tolerate fraud against the government," said Attorney General Alberto
Gonzales. "Since 1986, the Justice Department has recovered $18 billion from
those who commit fraud. These funds are then restored to their intended public
purposes and save taxpayers' money."

“By any measure, it was a remarkable year,” said Peter D. Keisler, Assistant
Attorney General of the Department’s Civil Division. “Recoveries in health
care fraud climbed more than a billion dollars over last year, and recoveries
outside the health care arena–which accounted for 28 percent of the
total–increased by half a billion. Obviously, the system is working.”

Assistant Attorney General Keisler also paid tribute to Senator Charles
Grassley of Iowa and Representative Howard L. Berman of California who
sponsored the 1986 amendments to the False Claims Act, the government's primary
weapon to fight fraud against the government.

Government-initiated claims accounted for $1.8 billion of the total $3.1
billion, while suits brought by whistle blowers under the False Claims Act's
qui tam provisions accounted for the remaining $1.3 billion. The qui tam
provisions authorize individuals to file suit on behalf of the United States
against those who have falsely or fraudulently claimed federal funds. Such
cases run the gamut of federally funded programs from Medicare and Medicaid to
defense contracts, disaster assistance and agricultural subsidies.

Individuals who knowingly submit false claims for federal funds are liable for
three times the government’s loss plus a civil penalty of $5,500 to $11,000 for
each false claim. If the United States intervenes in a qui tam action, the
person who filed the suit may receive from 15 up to 25 percent of the
government’s recovery. In FY 2006, whistleblowers were awarded $190 million.
(This figure does not reflect whistleblower shares for FY 2006 settlements that
were or will be determined after Sept. 30, 2006.)

By industry, 72 percent of the recoveries were in health care, 20 percent in
defense, and 8 percent other. Health care fraud accounted for $2.2 billion in
settlements and judgments, including a $920 million settlement with Tenet
Healthcare Corporation, the nation’s second largest hospital chain. Although
Medicare and Medicaid, both administered by the Department of Health and Human
Services, bear the brunt of health care fraud, other programs that are affected
include the Federal Employees Health Benefits Program run by the Office of
Personnel Management, the TRICARE military health insurance program run by the
Department of Defense, and health care programs run by the Department of
Veterans Affairs, the Department of Labor and the Railroad Retirement Board.
Defense procurement fraud accounted for $609 million in settlement and
judgment awards, including a $565 million settlement with The Boeing Company,
the nation’s second largest defense contractor.